Buckner v. TigerSwan, Inc.

IN THE COURT OF APPEALS OF NORTH CAROLINA
No. COA15-446
Filed: 15 December 2015
Wake County, No. 13CVS564
DALE BUCKNER, Plaintiff,
v.
TIGERSWAN, INC., Defendant.
Appeal by defendant from Order entered 6 August 2014 by Judge Henry W.
Hight, Jr. in Wake County Superior Court. Heard in the Court of Appeals 19 October
2015.
MICHAEL W. STRICKLAND & ASSOCIATES, P.A., by Michael W.
Strickland, for plaintiff.
MAGINNIS LAW, PLLC, by Edward H. Maginnis and T. Shawn Howard, for
defendant.
ELMORE, Judge.
TigerSwan, Inc. (defendant) appeals from the trial court’s Order for Summary
Judgment in favor of Dale Buckner (plaintiff). After careful consideration, we reverse
the trial court’s Order and remand for a new hearing.
I. Background
In January 2012, plaintiff accepted the role of Director of Operations at
TigerSwan, Inc., a company based in Apex that provides operational risk
management, training logistics, crisis management, business intelligence, and
BUCKNER V. TIGERSWAN, INC.
Opinion of the Court
security counseling services. While plaintiff was employed by defendant, plaintiff
loaned defendant money via two promissory notes. Defendant executed Note One on
5 March 2012 in the amount of $150,000, and it was due on 5 October 2012.
Defendant executed Note Two on 17 April 2012 in the amount of $103,500, and it was
due on 17 October 2012. In June 2012, plaintiff submitted his intent to resign in two
weeks.
After plaintiff resigned, he filed a complaint on 11 January 2013 alleging that
defendant was in default on the promissory notes. At the time plaintiff filed the
complaint, he alleged defendant owed $7,337.47 pursuant to Note One, plus seven
percent interest, and $103,500 pursuant to Note Two, plus six percent interest.
Defendant filed an answer, including affirmative defenses and counterclaims, on 7
February 2013. Defendant pled the affirmative defenses of unclean hands, waiver,
estoppel, and accord and satisfaction. Additionally, defendant pled the following
counterclaims: breach of contract, breach of fiduciary duty, constructive fraud, unfair
and deceptive trade practices, misappropriation of trade secrets, and temporary and
permanent injunctive relief.
Plaintiff filed a motion for summary judgment on 4 April 2013. On 24 May
2013, plaintiff filed a notice of hearing, indicating that its motion would be heard on
30 May 2013. On 24 June 2013, the trial court denied plaintiff’s motion for summary
judgment, stating, “Plaintiff moved for Summary Judgment only upon its claim that
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Defendant breached the promissory note . . . . Plaintiff did not move for Summary
Judgment upon the Counterclaims of Defendant . . . . Defendant did not move for
Summary Judgment on its own claims.”
On 7 April 2014, the trial court was scheduled to hear arguments on plaintiff’s
motion in limine, which related to defendant’s counterclaims. After calendar call,
defendant informed plaintiff that it was dismissing its counterclaims. During the
hearing, after informing the court that defendant was dismissing its counterclaims,
plaintiff requested an “opportunity to prepare another motion in limine based upon
the lack of counterclaims” to exclude all evidence of damages and actions complained
of in the counterclaims. Based on the foregoing, the trial court asked the parties to
amend the pretrial conference order to reflect the current position, stating, “You can
take as long as you want. You got at least 15 minutes.” Counsel stated that they
would need to go back to their offices, and the trial court informed them that they
could handwrite the new order. At this time, defendant filed a voluntary dismissal
of its counterclaims.
After the fifteen-minute recess, the trial court briefly allowed each side to
present its position. Plaintiff argued, “This leaves then nothing before the Court but
a suit on a promissory note where the parties have stipulated that it’s valid and
unpaid.” Defendant argued that clause 3(v) in the promissory notes allows defendant
to put on equitable defenses. The trial court asked each side to “provide for me what
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Opinion of the Court
you think your evidence is going to show for the record [so] that I can consider that,
plus whatever law you have, in determining whether we need to go further in this
case, so that if I rule in his favor, everything’s preserved[.]” The court asked plaintiff
and defendant if they could “get all that done by 2:30[,]” and then it recessed for lunch.
Plaintiff and defendant both presented evidence, and the trial court concluded,
For the purposes of this proceeding, I’m going to take all of
the allegations of the defendant as true and will accept the
undisputed stipulations of fact as set forth in the pretrial
order. And based upon those two things would direct
judgment in in [sic] favor of plaintiff in the amount of
$103,500. Dismiss any claims of equitable principles as
applies [sic] offsets or nullification of contract entered into
between the parties on April the 17th, 2012.
Following the oral entry of judgment on 7 April 2014, the trial court entered an “Order
for Summary Judgment” on 6 August 2014, which stated,
With the dismissal of Defendant’s Counterclaim,
Defendant’s only defenses are the affirmative defenses of
unclean hands, waiver and estoppel[.] Defendant, having
offered all of its exhibits and having offered a profer [sic] of
its evidence, has failed to establish any material fact which
would prevent entry of judgment in favor of Plaintiff.
Defendant appeals.
II. Analysis
A. The Trial Court’s Order
“The standard of review for summary judgment is de novo.” Forbis v. Neal,
361 N.C. 519, 524, 649 S.E.2d 382, 385 (2007) (citing Builders Mut. Ins. Co. v. North
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Opinion of the Court
Main Constr., Ltd., 361 N.C. 85, 88, 637 S.E.2d 528, 530 (2006)). Summary judgment
is appropriate “[i]f the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that any party is entitled to a judgment as a matter
of law.” N.C. Gen. Stat. § 1A-1, Rule 56(c) (2013). “The trial court may not resolve
issues of fact and must deny the motion if there is a genuine issue as to any material
fact.” Forbis, 361 N.C. at 524, 649 S.E.2d at 385 (citing Singleton v. Stewart, 280 N.C.
460, 464, 186 S.E.2d 400, 403 (1972)). “The motion shall be served at least 10 days
before the time fixed for the hearing.” N.C. Gen. Stat. § 1A-1, Rule 56(c) (2013).
Defendant argues that the trial court’s order must be reversed and this case
remanded because plaintiff did not move for summary judgment and defendant did
not have the requisite ten-day notice of the hearing. We agree.
Plaintiff maintains that summary judgment may be entered without a motion,
and alternatively, the court’s judgment may be treated as a directed verdict or
judgment on the pleadings. Plaintiff acknowledges that “[w]here no motion for
summary judgment is filed and no notice given[,] a court’s entry of summary
judgment [has] been held improper[,]” citing Britt v. Allen, 12 N.C. App. 399, 183
S.E.2d 303 (1971). Nevertheless, plaintiff cites to Erthal v. May, 223 N.C. App. 373,
387, 736 S.E.2d 514, 523 (2012), for the proposition that, in certain circumstances, a
party is not required to move for summary judgment to be entitled to it.
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In Erthal, the defendants moved for partial summary judgment, and the trial
court denied the defendants’ motion and instead granted summary judgment in favor
of the plaintiffs. Id. at 375, 736 S.E.2d at 516. On appeal, the defendants argued
that the trial court lacked authority to grant summary judgment in favor of the
plaintiffs because the plaintiffs did not file a motion for summary judgment and the
defendants were not given the required ten-day notice. Id. at 387, 736 S.E.2d at 523.
This Court stated, “Rule 56 does not require that a party move for summary judgment
in order to be entitled to it[,]” citing N.C. Coastal Motor Line, Inc. v. Everette Truck
Line, Inc., 77 N.C. App. 149, 151, 334 S.E.2d 499, 501 (1985), and “the trial court can
grant summary judgment against the moving party.” Erthal, 223 N.C. App. at 387,
736 S.E.2d at 523 (citing Carriker v. Carriker, 350 N.C. 71, 74, 511 S.E.2d 2, 5 (1999)).
Moreover, we stated, “Our Supreme Court has previously held that even if the parties
have only moved for partial summary judgment, it is not error for the trial court to
grant summary judgment on all claims where both parties are given the opportunity
to submit evidence on all claims before the trial court.” Id. (citing A-S-P Assocs. v.
City of Raleigh, 298 N.C. 207, 212, 258 S.E.2d 444, 448 (1979)).
In contrast, here there was not a pending motion for full or partial summary
judgment filed and noticed by at least one party. Instead, both plaintiff and
defendant only had notice that they were participating in a hearing regarding a
motion in limine. Although Rule 56 does not require a party to move for summary
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judgment to be entitled to it, it does require at least ten days’ notice of the time fixed
for the hearing.
In Britt v. Allen, cited by defendant, the trial court dismissed with prejudice
the plaintiffs’ claim and sua sponte entered “judgment as of nonsuit.” 12 N.C. App. at
400, 183 S.E.2d at 303–04. On appeal, we stated, “Although not designated as such,
the judgment appealed from amounted to a summary judgment.” Id. at 400, 183
S.E.2d at 304. We noted that the “defendant made no motion for summary judgment”
and “the judgment was entered on the court’s own motion. Not only did defendants
fail to move for summary judgment but plaintiffs were not given at least 10 days’
notice before the time fixed for the hearing as required by Rule 56(c).” Id. at 400–01,
183 S.E.2d at 304. Accordingly, we held, “Since the procedure prescribed by Rule 56
was not followed, the judgment appealed from is erroneous.” Id. at 401, 183 S.E.2d
at 304 (citing Ketner v. Rouzer, 11 N.C. App. 483, 182 S.E.2d 21 (1971); Lane v. Faust,
9 N.C. App. 427, 176 S.E.2d 381 (1970)).
Additionally, in Zimmerman’s Dept. Store v. Shipper’s Freight Lines, we stated,
“Failure to comply with [the] mandatory 10 day notice requirement will ordinarily
result in reversal of summary judgment obtained by the party violating the rule.” 67
N.C. App. 556, 557–58, 313 S.E.2d 252, 253 (1984) (citing Ketner v. Rouzer, 11 N.C.
App. at 488–89, 182 S.E.2d at 25). Although the plaintiff “had announced its
readiness to proceed to trial, such readiness is in no way equivalent to readiness to
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respond to a motion for summary judgment.” Id. at 558, 313 S.E.2d at 253. Thus, we
concluded that the trial court erred in entering summary judgment for the defendants
as they failed to comply with the notice requirement in Rule 56. Id.
“There is, we think, a sound reason for the mandatory form in which the 10-
day requirement is expressed in the Rule.” Ketner, 11 N.C. App. at 488, 182 S.E.2d
at 25. Because defendant did not have the requisite ten-day notice under Rule 56,
the trial court erred in entering summary judgment in favor of plaintiff.
B. Judgment on the Pleadings or Directed Verdict
Plaintiff alternatively claims that the trial court’s order may be treated as a
judgment on the pleadings or a directed verdict. We disagree.
Rule 12 of the North Carolina Rules of Civil Procedure states,
(c) Motion for judgment on the pleadings.—After the
pleadings are closed but within such time as not to delay
the trial, any party may move for judgment on the
pleadings. If, on a motion for judgment on the pleadings,
matters outside the pleadings are presented to and not
excluded by the court, the motion shall be treated as one
for summary judgment and disposed of as provided in Rule
56, and all parties shall be given reasonable opportunity to
present all material made pertinent to such a motion by
Rule 56.
N.C. Gen. Stat. § 1A-1, Rule 12(c) (2013). “No evidence is to be heard, and the trial
judge is not to consider statements of fact in the briefs of the parties or the testimony
of allegations by the parties in different proceedings.” Lambert v. Cartwright, 160
N.C. App. 73, 75, 584 S.E.2d 341, 343 (2003). Here, because the trial court considered
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matters outside of the pleadings, including arguments from both sides and a binder
full of evidentiary materials from defendant containing a number of e-mails and other
documents, we cannot treat the trial court’s Order for Summary Judgment as a
judgment on the pleadings under Rule 12.
A directed verdict is also inappropriate at this procedural posture. Under Rule
50 of the North Carolina Rules of Civil Procedure, a party may move for a directed
verdict at the close of the evidence offered by the opponent and at the close of all of
the evidence. N.C. Gen. Stat. § 1A-1, Rule 50(a) (2013). “[I]t is well settled that a
motion for a directed verdict only is proper in a jury trial.” Dean v. Hill, 171 N.C.
App. 479, 482, 615 S.E.2d 699, 701 (2005); see also Miles v. Carolina Forest Ass’n, 167
N.C. App. 28, 34, 604 S.E.2d 327, 332 (2004).
Plaintiff argues that in Harvey and Son v. Jarman, 76 N.C. App. 191, 199, 333
S.E.2d 47, 52 (1985), we held that the trial court has inherent power to direct a verdict
where facts are admitted. Plaintiff, however, fails to mention that the case proceeded
to a trial by jury, both parties put on evidence, and then the trial court entered a
directed verdict. Id. at 193, 333 S.E.2d at 48–49. Here, the parties were in court for
a pretrial hearing on a motion in limine and were not participating in a jury trial.
Thus, it would be inappropriate to treat the Order for Summary Judgment as a
directed verdict.
C. Questions of Fact
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Defendant contends that should we determine it had sufficient notice to
participate in a summary judgment hearing, it proffered enough evidence to establish
material issues of fact. Because summary judgment should not have been entered
based on lack of notice under Rule 56, we do not reach the merits of this argument.
III. Conclusion
The trial court erred in entering summary judgment in favor of plaintiff
because defendant did not have the requisite ten-day notice under Rule 56. We
reverse and remand for a new hearing.
REVERSED AND REMANDED.
Chief Judge McGEE and Judge INMAN concur.
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